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LH Bank putting more micro branches in Home Pro stores

Feb 11. 2015
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LAND and Houses Bank is moving towards higher technology and expanding its micro branches in HomePro stores upcountry as part of its plan to cash in on the Asean Economic Community (AEC).

Like several other financial institutions that are riding the digitalisation wave, it is high time for LH Bank to seriously tap the trend, president Sasitorn Phongsathorn said yesterday.

The first serious move of the bank is in payment services. True Money and Counter Service counters nationwide will be the gateway for the bank to collect instalments for mortgages and auto loans and insurance policies. The service will be available in April.

The bank will launch its digital banking service in the fourth quarter of this year.

True Money and Counter Service are business arms of Charoen Pokphand Group, which has been reported as buying a controlling stake in LH Bank, but Sasitorn said the bank was welcoming more electronic service providers, not just True Money.

The Asavapokin family and their real-estate arm Land and Houses Development are the current major shareholders of LH Financial Group, the holding company for LH Bank.

“We’re still in non-binding talks with two to three partners. The economic uncertainties and the fuel-price drop are critical factors for partners in establishing a footprint in Thailand with us. So LH Bank must focus on organic growth our own way,” she said.

The bank has been aggressively opening micro branches in HomePros in the past two years to comply with the outside-in strategy. Deposits from customers upcountry jumped to 12 per cent from 7 per cent in the past.

This year, the bank will add 10 branches, of which eight will be micro branches in HomePro and two will be full branches.

“We will open a full branch when the transactions at a micro branch are great enough. Starting out with micro branches will help us in saving costs and letting me know the right direction to tap customers,” she said.

HomePro stores are located in provinces and metro cities near transport hubs and neighbouring countries, so LH Bank has the chance to benefit from the AEC.

Under the organic growth plan, the bank must keep loans increasing by more than 20 per cent and profit by 10-15 per cent a year.

The bank will raise Bt3 billion to Bt5 billion in the middle of this year by issuing Tier 2 subordinated debentures to strengthen its capital adequacy ratio (CAR) and support business growth for at least three years. After issuing the bonds, its CAR will improve to 13 per cent from 12.41 per cent, of which 11.32 per cent is Tier 1 capital.

Sutharntip Phisitbuntoon, executive vice president, said the bank projected loan growth of 22-25 per cent to Bt143 billion this year from Bt116 billion last year.

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